Management of thousands of Tyneside council homes was today handed over to a company in a move which officials hope will attract £348m in Government funding.

The new city council-owned not-for-profit firm Your Homes Newcastle is the biggest "arm's-length" management company in the country after taking over 33,000 homes in the city.

It will oversee a programme of multi-million-pound improvements in homes with councillors claiming more involvement in housing for tenants.

Norman Dipper, 76, who has lived in Shieldfield House for 30 years, welcomed today's development.

He said: "With house prices being beyond the reach of many newly-married couples, more people now look towards rented housing. Your Homes Newcastle is making people think about council housing again."

West Denton tenant Margaret O'Callaghan is a representative on the Your Homes Newcastle board.

She said: "When I was a girl and got married, to go on the council list and get a council house was like winning the Lottery.

"People don't think like that now as the houses have been allowed to deteriorate because councils haven't had enough money to modernise them. I want people to be proud to be a tenant of a council-owned home in Newcastle."

Studies three years ago found eight out of 10 council properties failed to meet Government standards, with an estimated £700m needed for repairs.

This was more than the council's existing resources but it was told that a total of £348m will be given to Your Homes Newcastle, subject to it achieving a two-star, or "good" rating in an inspection by the Audit Commission this November.

A postal survey of tenants last December showed 87% of those who responded supported the move. Coun Ruth Robson, the city council's cabinet member for housing and community services, said today's hand-over was a "momentous occasion" for city tenants.

She added: "The launch of Your Homes Newcastle will bring millions of pounds into the city to bring the much-needed improvements our tenants want and deserve.

"It will enable the city to achieve the Decent Homes standards that the Government says we must meet and will give tenants a greater say in the housing service of the future."

John Lee, chief executive of the new housing firm, said: "This is an exciting time and launching Your Homes Newcastle today is an important milestone in our journey to delivering excellent services and modern homes for our tenants and the city."